Refreshingly, Dr. Uzi Arad’s Institute of Policy and Strategy (to whose board this writer belongs) has approached national security in its widest sense, not merely as military strength. It also analyzed the economic, technological and geo-political underpinning of national security, as well as education and science, demography, the Zionist ethos and morale.

This is no mean achievement. For decades, Israel’s security issues have totally overshadowed any other vital matter, certainly economic concerns. Consequently, in the last decade alone, Israel’s rigid, anti-productive, bureaucratized economic “system” has almost halted productivity growth. This resulted in a conservatively estimated loss of 100 billion dollars in national product. Imagine what use, just for defense purposes, such a sum could make, since it is equivalent to 50 years of American military aid!

Strategic planners often seem oblivious to the economy’s importance, though lack of economic growth is also behind most of Israel’s social ills, from unemployment to dismal salary levels. Excessive dependence on government handouts, and fierce competition for government favor are aggravating social fragmentation, and destroy the social cohesion that societies in danger must strive to maintain. They also break apart political parties, making Israel so hard to govern.

Or take education. Israel’s future depends on its brainpower. It gives it both an edge of technological superiority that can compensate for Arab superiority in numbers and weaponry, and it ensures its economic viability through export-oriented growth. Yet, despite immense resources put at its disposal (among the highest per capita in the world) the educational system is in shambles, progressively producing less and less literate students.

This should not surprise anyone acquainted with the outdated (though faddish) bureaucratized, centralized government controlled (hence politicized) educational system. By eliminating competition and accountability, by not offering rewards for creativity or excellence, it promotes mediocrity and illiteracy. Politicized governmental bureaucracies are innately incapable of performing complex tasks – they can barely manage the removal of garbage or sewer maintenance – so to have them provide education is to court the disaster we have. Only by introducing some competition into the educational system through a voucher system that offers educational choice to enough parents and students, (and increasing equal opportunity by giving lower income strata higher worth vouchers to buy better education) is there hope for improvement.

Practically every problem the conference tackles was caused by excessive government intervention, either through direct meddling or through the creation of wrong incentives. Excessive intervention also prevents government from performing vital functions it is supposed to fulfill, the creation of a good framework of law and a supporting environment for development. Nowhere is this clearer than in our hi-tech, where Israel’s excellent “human capital” provides it with strong relative advantage. Yet unless government policy on laws of incorporation, mergers and taxation will change soon, Israel will lose most of its high yielding hi-tech companies. Some are already in the process of migrating to better environments, and many will follow simply because they cannot otherwise compete successfully and survive. Here is a clear-cut example of how our derelict economic system is literally slaughtering the geese that lay the golden eggs.

The conference also signals a greater openness by the defense establishment to discuss in an open forum security questions such as strategy and deterrence. Hopefully in the follow up to the conference more outside voices can be brought in. Not that the discussants, the highest brass, are not each an authority in his field. But, like authorities everywhere, they still need to hear serious voices of dissent, those who could challenge accepted wisdom and provoke fresh consideration and thought.

The defense establishment is so formidable and hierarchical, that while it commands some of the best and brightest, it is in danger of becoming inbred and conformist. In the past this resulted in the inability to overcome a wrong conception prior to the Yom Kippur War or to successfully tackle the Intifada. A public conference dealing with security must therefore strive, as the Herzliya Conference, to ask new questions and include more outside participants. They could discuss such issues as how to make a more efficient use of the defense budget, and address serious questions of morale and of basic values. If such open discussion will take place both in between conferences and in future ones, it will enhance their “added value”, as well as their future usefulness and importance.

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